Australian Banks Ride the Blockchain After Pushing Out Bitcoin Companies

National Australia Bank and the Commonwealth Bank of Australia will be taking part in a joint project led by global financial innovation firm R3

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National Australia Bank and the Commonwealth Bank of Australia will be taking part in a joint project led by global financial innovation firm R3 to design protocols based on blockchain technology at the same time as the ACCC has begun investigating the banks for closing the accounts of Bitcoin businesses last month.

Australia’s two of the largest banks, National Australia Bank and the Commonwealth Bank of Australia, will join R3, which includes 20 other major banking groups including HSBC and Citigroup, to explore the underlying technology of bitcoin and its uses to optimize and improve settlements and overall banking operations.

The news comes after the decision by the two banks to close all accounts associated with bitcoin startups and projects because according to the banks, all bitcoin startups failed to comply with KYC (know your customer) and AML (anti money laundering) policies. All major banks of Australia abruptly shut down accounts of bitcoin companies without any prior notice on the same day.

The Australian Competition and Consumer Commission has already begun their investigations to find out the reason behind the banks’ collaborate decision. ACCC chairman Rod Sims told the Australian Financial Review the investigations are in the early stages and the organization has asked the banks to explain their actions.

"It is being investigated. We have already spoken to some banking representatives and sought some information. It is all still early stage, but under way," said Sims. "We are asking the banks why they acted as they did and what contact there was between them."

The investigation by the ACCC was requested by Australian senator Matthew Canavan, who suspects the banks have decided to proceed with the closing of all accounts associated with bitcoin because they wanted to avoid competing with emerging companies.

"We have strong laws against one business obstructing another business competing against it. These laws are even tougher for those companies that have the privileged position of a significant market share."

While the ACCC has already started interviewing the banks and financial institutions involved, it will take around a couple of months for the ACCC to conclude the investigation. Until then, all bitcoin related businesses will not be able to use their bank accounts to transact with its customers and partners.